Last month a Foreign Ministry inquiry concluded that the deal was "seriously flawed" because the Park Geun-hye administration kept some of Korea's concessions secret and failed to consult the victims before agreeing to it.

It lets Japan off admitting direct responsibility for drafting thousands of Asian women, mostly Korean, into sexual slavery for the Imperial Army in World War II.

Japan paid 1 billion yen into a fund supporting the victims and extracted promises from Seoul to remove statues honoring the victims from the vicinity of Japanese diplomatic missions.

About W10.8 billion of the money has already been paid to some of the victims or their families and some W6 billion still remains. The Foreign Ministry will make a decision later on how to handle the rest of the money and whether to maintain the fund.

But even ministry officials called Tuesday's announcement a "stopgap measure." Kang read out her statement and left the press room without taking questions from reporters, which reflects how awkward the situation is.

There was no immediate explanation how the government can refuse the money without scrapping the deal or admitting that the Park administration's pledges are impossible to fulfill.

Seoul's promise to remove the statues near the Japanese Embassy in Seoul and the consulate in Busan have already hit a snag because they sit on municipal land over which the central government has no authority, and were paid for with private donations.